Crisis Management

"Failure to have a workable crisis management program is asking to play Russian Roulette with an automatic pistol. You do not have the luxury of pulling the trigger on an empty chamber" (Hogue). Every company should

be prepared for all kind of crises. No matter how prestigious and successful a company is, if it fails to confront a crisis, it can lose everything. First of all, what is a crisis? Seitel says a crisis is "a situation that has reached a critical phase for which dramatic and extraordinary intervention is necessary to avoid or repair major damage" (p. 385). In order for a company to overcome a crisis and still keep good reputation they should simply have a well-done crisis management plan. If companies have a plan before things "go wrong" then everything else will be a piece of cake when a crisis undertakes.

Crises come and go at any time unexpectedly; they will merely break you or make you. In the middle of a crisis is better to deal with it quickly, taking action and making sure that the community you serving, or whoever is your main audience/beneficiaries, know that you are doing something.

Planning in a Crisis

In "The Practice of Public Relations" Fraser P. Seitel illustrate what he calls "the five planning issues paramount" (387 through 388) that is the five steps a company should take in the middle of a crisis. First of all, define the accident occurred. Sietel recommends companies to know the problem before communicating it. Second step involves letting the public know what should be done to reduce the risk.

Fraser believes that if companies acknowledge the problem to the public they will more likely believe any solutions for the problem. Third action to be taken is to admit what went wrong. If the community sees you know you did wrong and that you know exactly how it happened then they will definitely believe you will fix the problem.

Fourth move that should be done in the middle of a crisis is to take action! You cannot just identify the problem, let the community know what’s going on and not do anything. An action plan should be conducted and put it to work right away. Last but not least phase of the planning during a crisis is to get a spokesperson to let everybody know what’s going on and how the crisis is getting resolved.

The public wants to know everything about the crisis and the right person should be chosen to communicate with the media. All that needs to be done is take responsibilities and never lie or cover up what the reality is. They should merely show they are in control of the situation and put an end to the crisis as soon as possible. If all of these steps are done correctly, then any company would be able to survive and keep on.

Company Overview: Exxon Mobil

Let me introduce you to the world's largest integrated oil and gas company, Exxon Mobil. According to Yahoo Finance, this well-known company deals with the production, supply, transportation, and marketing of oil and gas all around the world. It has showed to have the capacity of 24.8 billion barrels in reserves. Exxon Mobil has over 30 refineries in 20 different countries with an incredible capacity to produce around 6.3 million of barrels per day.

This company supplies its refined products to more than 26,000 gas stations in 100 countries. With no doubt this company truly has a successful existence in the world. Nobody will actually think companies like this will end up in a crisis. But the truth is that this company did confront a terrible crisis that gave a lot to talk about and that till these days’ people remember.

Crisis: Exxon Valdez Oil Spill

It all started March 24th, 1989. Exxon Mobil was doing transportation for a large amount of oil in its supertanker through the Prince William Sound, Alaska towards California. It was a clear day and everything was going according to plan but something changed Exxon Mobil history forever. The ship, due to the irresponsibility of the crew, ran aground spilling millions of crude oil all over the sea killing millions and millions of species. This was the largest environmental disaster ever in the USA history (Smith). The main cause of this huge accident was alcohol abuse.

According to one of the many articles from The New York Times on Exxon’s failure, the ship’s captain Joseph J. Hazelwood was dirking uncontrollably vodka the night this happened. The captain left the ship on cruise control while he was having drinks. In Professor Ron Smith case study, from the Buffalo State College, it states that 500, 000 birds from 90 different species died with this oil spill; alone with 4, 500 sea otters, 14 killer whales, and many salmon, herring, clams, mussels , and seaweeds. In addition the devastating damages experience in the Valdez shores and community. Needless to say this was a disastrous event with no excuses due to human careless actions.

Company's Actions & Reactions

Exxon's reaction to the disaster was worse than the crisis itself. As we all know when this type of flukes happen people want to know what’s going on. And when I say people I'm referring to the publics: government, oil industry, stockholders, the media, and the environmental activists. Exxon's biggest incompetence was to communicate. They completely avoided the outsides not paying attention and/or answering back to what was said, speculated, or questioned. They just thought that by hiding the truth of reality with "no comments" they will do well.

""No comment" sounds too evasive and suggest to people you're hiding something or worse. No comment usually sounds "guilty"" (Seitel 192). Fraser Sietel suggests that when companies are handling the media under pressures and in the middle of catastrophes like this, they should stay connected to the media. The media can be good and bad but somehow in this case Exxon’s had the opportunity to take advantage of it. Not only would they be able to help them start cleaning their reputation but also let the publics know they care.

Furthermore, Exxon's CEO, Lawrence Rawl, was one of the reasons why Exxon failed. When the media tried to reach Rawl for him to give a response to the crisis all he replied was "he had no time for that kind of thing" (baker). When distinguished companies face such problems those types of answers to the publics is just unacceptable. Before giving out any information to anybody, like I mentioned before, a spoke person should be assigned.

Also in our book on Chapter 19, page 384, Seitel gives a brief emphasis in what he called "Messaging Mapping". He believes that companies should get themselves really ready before opening their mouths.

Main audiences and concerns should be identified first and when giving out messages they should keep it simple, precise, credible, and supportive. Exxon refused to give information at all cost. When they decided to talk they would of only give some information from the Valdez town (Houge). They showed no respect for what was going on to nobody or anything when they finally spoke they contradicted in everything.

Moreover, Exxon’s CEO acted more like a little kid when finally interviewed. He went on TV and did not even know what the process in progress to stop the spillage was. He said "is not the CEO's responsibility to read those types of reports" (Smith). You have to be kidding me. Somehow when reading these things you kind of wonder why or how this people actually make it to the top.

Such mentality is not even enough to go play the lottery. Not only he said he would not have to know about what was going on but he also mentioned he would of raise oil prices in order for Exxon's to cover the recovery expenses. I mean what else do I have to say to make Exxon’s look even worst?

Fines and Consequences

Every act has it consequences. Exxon had to pay a lot of money in fines and recovery. The New York Times publicized that Exxon had to pay “$5 billion in punitive damages in 1994” which is was appealed by Exxon and reduced by the judged to only $500 million. All I think is how different it would be if the crew of the ship would just be more responsible that night. Ron Smith says on his article about this crisis that Exxon not only paid large amount of money on the recovery but also ended up losing market shares, dropped its stock price, and to kill it all it descended from being the number one oil company to the third.

No way that the public would think a company like this will be so irresponsible and careless at the time of a crisis. The only good thing I can say it resulted from this ridiculous event is the Oil Pollution Act. In 1990 this act came out as a form of protection that gives out regulations to not let these things happen and how would be handled if it does happen again (Emergency Management).

Lessons to learn

Exxon failed big time right in the middle of the biggest environmental crisis in history. They did not have a plan at all for this kind of event. They did not show leadership, failed to show they care, and they didn’t involve the media at all (Smith). Crisis management should not start the day the crisis come to you, but rather the day a company comes aboard to serve the world. Contingency plans should be included right after your business plan is created. Why? Companies are not only to serve and generate a profit but also they have a social responsibility.

That’s why companies should have the public relations department to deal with what Seitel calls “unplanned visibility” aka crisis which can come up into any company at any time (p. 381). Seitel says it in our book on page 388 “the simple but appropriate watchwords for any crisis plan are: be prepared, be available, be credible, and act appropriately”. The point is to always be ready, try out contingency plans before anything happens to see if they effective, if not, change them. But if the problem is already at hand, public relations should do their job accordingly. Time, Communication and Responsibility are the three keys to success before, during, and after a crisis.

Crisis of any kind can harm you and your surroundings. The impact that an oil spill can have was already experienced on the Exxon Valdez oil spill. Any company should always measure the impact of their actions so that things like that would not happen. A plan B is always needed even if plan A works because is better to be prepared than failed to plan A and stay as an incompetent. As we experienced throughout this research we can denote that a single oil spill can be a huge fiasco for people, the marine life, and the environment forever.

There are a lot of non-profit companies and the government itself that keeps companies aware of advices that can prevent such situations. All of this advices and plans provided by such companies should be taken seriously. The public relation along with the top managers should work together on implementing these prevention strategies to all employees.

Cited Works

Baker, Mallen. “Companies in Crisis - What not to do when it all goes wrong”. Web. http://www.mallenbaker.net/csr/crisis03.html

Emergency Management. Updated January 28, 2011. No editor. May 25, 2011. Web. http://www.epa.gov/oem/content/lawsregs/opaover.htm

Gaps III, John. “Exxon Valdez Oil Spill (1989).” The New York Times edition Aug. 3, 2010. May 25, 2001 Web. http://topics.nytimes.com/top/reference/timestopics/subjects/e/exxon_valdez_oil_spill_1989/index.html

Hogue, Jennifer. “Avoiding Disasters: The Importance of Having a Crisis Plan”. May 25, 2001. Web. http://iml.jou.ufl.edu/projects/spring01/hogue/index.html

Seitel, Fraser. The Practice of Public Relations. Boston: Prentice Hall, 2011.

Smith, Ron. “Exxon Valdez Oil Spill”. May 25, 2011. Web. http://faculty.buffalostate.edu/smithrd/PR/Exxon.htm